Abbott says no to GST on fresh food

Jamie Briggs

Jamie Briggs has been ignored, with Tony Abbott saying his GST call was “just a view from a backbencher”. Picture: Kym Smith
Source: Supplied





OPPOSITION Leader Tony Abbott has slapped down suggestions by one of his backbenchers that the GST be extended to cover fresh food.


As the second and final day of the Canberra tax forum got underway this morning, federal Liberal MP Jamie Briggs said state governments should be arguing for the stretch of the GST to be extended.

“I mean let’s not forget the GST in the first place was meant to be applied to food and services,” the South Australian told ABC Radio in Adelaide.

“But part of the deal, because of the Labor Party’s complete opposition to the GST, even when it got an electoral mandate, meant that a deal had to be done with the Democrats and excluded food and services.”

Asked if he would like to “unwind” that, Mr Briggs replied: ” think it has to be discussed, I mean if you’re serious about having a tax forum”.

The states have consistently argued they need more tax revenue from the Commonwealth, so they can afford to remove much-criticised “inefficient” taxes, like stamp duty.

Treasurer Wayne Swan said the Gillard government “absolutely rejects” calls to increase the rate or the base of the GST because it would make life difficult for families.

“So I think Mr Abbott today ought to indicate whether he supports that move from Jamie Briggs, a prominent Liberal backbencher, or not.”

Mr Abbott, in Victoria today, disagreed with Mr Briggs.

“It’s just a view from a backbencher – it’s not our policy,” Mr Abbott said.

“We have no intention whatsoever of making any change in this area.”

Mr Abbott said he had not disciplined Mr Briggs over the comments.

“We are not Stalinists,” he said, “but that is not a view shared by anyone else in our party.”

During discussions at the tax forum today businessman Mark Carnegie warned that unless the wealthiest Australians paid an extra 15 per cent in tax, the nation could find itself “facing the sort of nightmare” as the United States and parts of Europe.

“The richer of us are very lucky and we need to stand up and take responsibility and do something about this yawning demographic problem,” he said.

Financial policy expert Greg Smith warned welfare payments system would soon become unsustainable.

“I’m sorry to inject a sad note into the discussion, but my prediction for the next 10-15 years is that the issue will not be stop the taxes or stop the boats, it will be stop the welfare system,” he said.

Government spending had to be more efficient so the strains on the welfare transfer system did not place significant pressures on the budget, Mr Smith said.

“It is a crisis … Australia has to basically become much, much smarter with the way we do government spending and the way we do the transfer system if we are going to make this a sustainable policy.”

Judy Yates, an associate professor from Sydney University, warned the tax forum that unless young people could afford to buy their own homes there would be massive pressures on welfare payments, including rent assistance, in the future.

Ms Yates said while the current tax system did not impose capital gains tax on family home or impose a land tax on home owners, Australia should introduce tax on all housing to help reduce house prices and encourage urban consolidation.

But Mr Swan said the family home was exempt from tax because it went very much to “the core of what I see is the Australian way”.

 

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